.

[dre]

No. I have no problem with seniors who need it collecting 500 per month. What I do have a problem with is people not wanting to accept the reality that to keep the costs of programs in check, the age requirements should rise with life expectancy. They should be indexed to each other.

If you want the age requirement to be 65 now at the current life expectancy, fine. But index them to each other. If life expectancy rises another 10% in the next 10 years from 85 to 93.5, then the age requirement should also rise 10% from 65 to 71.5. That will ensure that an equal proportion of the population receives these benefits in the future as now, preventing the budgets of programs like OAS from ballooning as a fraction of GDP. If life expectancy doesn't rise, then the retirement age won't change either.

People are living longer and healthier lives than ever before and the price of that is that they might have to work a few extra years before retiring.

Its not that simple. Unless you have full employment (we don't) then forcing seniors to stay on the job longer will just make it harder for younger people to enter the workforce. You will still have the same number of workers paying the same amount of taxes. No extra revenue will be raised to pay for longer retirements.

The economy as a whole will not generate more insurable income without more demand for workers or increased wages.

To illustrate this picture a tiny walled off economy in a country with 3 citizens and one business. One is young (20) and has not entered the workforce yet, one is middle aged and in the middle of their career, and the other is nearing retirement (65). The business sells enough widgets for it to need 3 employees to make them. In one scenario the older worker retires at 65... the business needs to fill that position so they hire the younger worker. In the other scenario you raise the retirement age to 67 and the older worker stays on for another two years... now there's no position for the younger worker to apply for, and he cant enter the workforce until hes 22. By the time hes 67 he will have worked the same amount of insured hours as the older worker would have between 20 and 65.

All you have done in the second scenario is made your work force older, and raised your unemployment rate.

.

[Bonam]

Its not that simple. Unless you have full employment (we don't) then forcing seniors to stay on the job longer will just make it harder for younger people to enter the workforce. You will still have the same number of workers paying the same amount of taxes. No extra revenue will be raised to pay for longer retirements.

The economy as a whole will not generate more insurable income without more demand for workers or increased wages.

To illustrate this picture a tiny walled off economy in a country with 3 citizens and one business. One is young (20) and has not entered the workforce yet, one is middle aged and in the middle of their career, and the other is nearing retirement (65). The business sells enough widgets for it to need 3 employees to make them. In one scenario the older worker retires at 65... the business needs to fill that position so they hire the younger worker. In the other scenario you raise the retirement age to 67 and the older worker stays on for another two years... now there's no position for the younger worker to apply for, and he cant enter the workforce until hes 22. By the time hes 67 he will have worked the same amount of insured hours as the older worker would have between 20 and 65.

All you have done in the second scenario is made your work force older, and raised your unemployment rate.

This is the exact opposite of the argument you always use in favor of immigration - more people, more demand, more jobs. Either more working people creates more demand thereby creating more jobs or it doesn't. Which is it?

[Topaz]

Correct me if I'm wrong, but it seems more boomers are not living as long as their parents or grandparents. One reason for this is life style like smoking it causing cancers at a younger age and high fat eating is causing more heart diseases and death. My own brother-in law, died of cancer last Nov. and it was the month of his first OAS cheque. There are and will be people will real need those programs at 65 and if one doesn't, then don't take them, but the feds will some how claw back those programs who make too much money through income tax.

[cybercoma]

This is the exact opposite of the argument you always use in favor of immigration - more people, more demand, more jobs. Either more working people creates more demand thereby creating more jobs or it doesn't. Which is it?

Working seniors faaaar outstrips the number of working immigrants, not to mention they could be seniors too.

[Big Guy]

A good beginning would be to bring in means testing for OAS. The original intent of the program is to guarantee that seniors who did not prepare for retirement would get a guaranteed minimum income. The spirit of that condition is to start a means test with those seniors with those earning $50,000 a year would get nothing and a sliding scale for the others.

[Argus]

I see this reversal as just another of Trudeau's style over substance policies. He gets to smile and get hosannas for what a swell guy he is for lowering the age once again, but he doesn't have to worry about costs because he won't be in power by then. To a politician, that's gravy! You get the cheers without costs! It takes a statesman to take the condemnation, as Harper did, without any benefits during his term. Harper made the decision because it was in the best interests of Canada. Trudeau made his decision for political advantage.

The U.K. is changing the qualification age for the British State Pension beginning in 2018 and is set to reach age 68 by 2046; Ireland is also boosting its retirement age to 68 as of 2028. The U.S. will move the age for Social Security eligibility to 67 by 2027. Age 67 is also the new benchmark for retirement in the Netherlands, Denmark, Belgium, France, Germany and Spain. Australia is lifting its state pension age from 65 today to 67 by 2023. All of these countries are phasing in the new ages over time, as was Canada.

http://business.financialpost.com/personal-finance/retirement/taking-oas-eligibility-back-to-age-65-makes-canada-the-odd-one-out-when-it-comes-to-global-pensions

Edited March 18, 2016 by Argus

[Smallc]

A good beginning would be to bring in means testing for OAS. The original intent of the program is to guarantee that seniors who did not prepare for retirement would get a guaranteed minimum income. The spirit of that condition is to start a means test with those seniors with those earning $50,000 a year would get nothing and a sliding scale for the others.

There already is a means test.

[PIK]

Time to take it away form the rich. If someone is very wealthy they can afford to give it up. It will save money or add a few bucks to the lower income people that are collecting it.

[Big Guy]

There already is a means test.

Thanks for the heads up. I did find additional information at:

http://www.esdc.gc.ca/en/cpp/oas/recovery_tax.page

[cybercoma]

Time to take it away form the rich. If someone is very wealthy they can afford to give it up. It will save money or add a few bucks to the lower income people that are collecting it.

The rich don't qualify for OAS or GIS.

[bush_cheney2004]

So the federal government means tests wealth in addition to annual income for OAS/GIS ? How does it do that ?

[Topaz]

Just because other nations are doing it doesn't mean any other country has to follow suit. Many nations because poor management, are doing this but I bet the very same guys that made the laws aren't suffering any. They get the perks politicians think they should get. When Harper made this law, he was ask what do people do from 65-67 that really need it, his answer was let the provincial welfare kick in to cover!

[Bonam]

I see this reversal as just another of Trudeau's style over substance policies. He gets to smile and get hosannas for what a swell guy he is for lowering the age once again, but he doesn't have to worry about costs because he won't be in power by then. To a politician, that's gravy! You get the cheers without costs! It takes a statesman to take the condemnation, as Harper did, without any benefits during his term. Harper made the decision because it was in the best interests of Canada. Trudeau made his decision for political advantage.

The U.K. is changing the qualification age for the British State Pension beginning in 2018 and is set to reach age 68 by 2046; Ireland is also boosting its retirement age to 68 as of 2028. The U.S. will move the age for Social Security eligibility to 67 by 2027. Age 67 is also the new benchmark for retirement in the Netherlands, Denmark, Belgium, France, Germany and Spain. Australia is lifting its state pension age from 65 today to 67 by 2023. All of these countries are phasing in the new ages over time, as was Canada.

http://business.financialpost.com/personal-finance/retirement/taking-oas-eligibility-back-to-age-65-makes-canada-the-odd-one-out-when-it-comes-to-global-pensions

Seems to me like if even some of these relatively left-leaning social democracies like Denmark (which is always praised by liberals in Canada and the US) are doing it, there's no reason we shouldn't do it too. It's not some evil heartless conservative policy trying to take money out of the hands of impoverished seniors; it's a common sense policy embraced by some of the world's most progressive social democracies.

The UK and Ireland are wise to go all the way to 68.

[msj]

OAS/GIS is income tested based on filing tax returns each year.

You can see the tables here for the GIS: http://www.esdc.gc.ca/en/cpp/oas/payments.page

You need to scroll down and expand the sections that say " select your annual income range."

OAS is clawed back based on net income above $72,809 for 2015.

The issue here is that pension splitting allows for many seniors to avoid clawback.

My example already alluded to above is the guy who gets $110,000 pension plus CPP (shares with wife) plus OAS.

Since he splits up to $55,000 of his pension with his wife he no longer has any OAS clawed back. And he saves income taxes too.

Hence my point about the BS behind the people claiming that we can't afford the age 65.

If we can afford to give people tax savings from pension splitting and the family tax cut then why not age 65 rather than 67?

And no, just because other countries are raising their age limits does not provide any kind of answer to this question.

This is about choices being made in Canada with respect to our taxation and spending priorities.

Other countries are irrelevant and are only presented as an "anchor."

Edited March 18, 2016 by msj

[bush_cheney2004]

OAS/GIS is income tested based on filing tax returns each year.

As I suspected...it has nothing to do with existing wealth.

A multi-millionaire with income that did not exceed income limits is still eligible for the OAS entitlement.

..This is about choices being made in Canada with respect to our taxation and spending priorities.

Agreed, but it is not uncommon here for other foreign revenue/spending priorities to be used to justify/validate Canadian policy .

Edited March 18, 2016 by bush_cheney2004

[msj]

As I suspected...it has nothing to do with existing wealth.

A multi-millionaire with income that did not exceed income limits is still eligible for the OAS entitlement.

Yes. I have a client with $2 million in a corporation.

Does not pay any claw back.

Pays income taxes (personal and corporate) but no claw back.

Only worth it, though, because to pull out the $2 million all at once would cost $735,000 in taxes whereas if he pulls it out over 20 years it will cost only about $350,000 or so in taxes (and of course an investment return for holding onto his own money for a longer period of time).

TFSA's will work in a much better way in the future since any withdrawal from one will not show up as income - which is why I put my savings first into a TFSA and second into a RRSP.

Since the RRSP converts to a RRIF at age 71/72 and since the RRIF is pension income it is then split with a spouse which also helps keep claw back away (hence my complaint above).

[dre]

This is the exact opposite of the argument you always use in favor of immigration - more people, more demand, more jobs. Either more working people creates more demand thereby creating more jobs or it doesn't. Which is it?

That was my point though. Raising the retirement age in and of itself wont result in more people working, or more taxes collected. The only thing that results in more people working is more employers hiring.

[scribblet]

As Rick Anderson said on CBC...some other government (the Tories...NDP wouldn't hit social programs or the libs) down the road will raise it back up. What should peeve off Canadians is they keep saying we can't afford but I bet if one could get the info on MP's pensions over their life time, more $$ are going out there in than in OAS or GIS.

I don't know about that but it could be so of any defined pension plan. Actually MPs pay quite a bit into their plan now as it's 50/50. Their contributions have risen from around $111,000 a year to around $39,000 a year.

OAS comes out of general revenues, there is no separate fund coming out of people's pockets. Trudeau will leave a huge debt for the young generation who will have to pay mega bucks for this as it’s costs are expected to double over the next 15 years and keep on growing.

According to a BMO report, seniors are anything but frail financially..

http://newsroom.bmo.com/press-releases/the-senior-set-bmo-report-suggests-today-s-older--tsx-bmo-201407110957072001

[msj]

OAS comes out of general revenues, there is no separate fund coming out of people's pockets. Trudeau will leave a huge debt for the young generation who will have to pay mega bucks for this as it’s costs are expected to double over the next 15 years and keep on growing.

But we do not have much to base this on other than speculation.

Trudeau has cut the family tax splitting which should keep $3 billion or so in the treasury per year.

He could make better off seniors pay OAS claw back by changing the pension splitting rules so that it only saves income tax rather than income tax and OAS claw back.

He could increase the income inclusion for capital gains to 75% or 100% which would likely cover off any deficit.

Those are only three changes that shift the balance to make 65 sustainable.

I'm sure there are lots of other ideas that would make it work just fine if we actually studied the situation rather than everyone simply assuming that 65 should be raised because of a biased assumption that it must be raised because people live longer.

That assumption narrows the options and leads to flawed policy options that do not consider a wider set of solutions.

Which is not to say that I am against raising the age, necessarily.

It's just that I have not seen enough good data to come to that conclusion.

[msj]

The UK and Ireland are wise to go all the way to 68.

Perhaps they are.

But if you are going to continue to insist that we frame this discussion about Canadian policies relative to other countries then at least one of the things that should be considered is something like this: https://pbs.twimg.com/media/CeAhAGRUYAEOpHC?format=pjpg&name=large

Hence my call for more data.

If Canada's liabilities including public pension liabilities are half of those of the U.K. then perhaps it is possible for age 65 to be fine for us while they are forced to go to age 68.

Which brings another factor for affordability for the age 65 in Canada: where can we squeeze out savings to keep the age 65?

Much better to spend a little bit of time understanding the problem and searching for many different types of solutions than just wily nily assume that since other countries are doing it (raising the age) then we must do it too.

[Argus]

If Canada's liabilities including public pension liabilities are half of those of the U.K. then perhaps it is possible for age 65 to be fine for us while they are forced to go to age 68.

There are no provinces in the UK. Add the debt of our provinces to the mix and it's not nearly so pretty. Plus the UK is desperately trying to cut down on its debt, while Canada is merrily piling on more without a hint of restraint.

[dre]

Perhaps they are.

But if you are going to continue to insist that we frame this discussion about Canadian policies relative to other countries then at least one of the things that should be considered is something like this: https://pbs.twimg.com/media/CeAhAGRUYAEOpHC?format=pjpg&name=large

Hence my call for more data.

If Canada's liabilities including public pension liabilities are half of those of the U.K. then perhaps it is possible for age 65 to be fine for us while they are forced to go to age 68.

Which brings another factor for affordability for the age 65 in Canada: where can we squeeze out savings to keep the age 65?

Much better to spend a little bit of time understanding the problem and searching for many different types of solutions than just wily nily assume that since other countries are doing it (raising the age) then we must do it too.

Affordability is only a factor if there's a persistent labor shortage. Changing the window that people are normally available to work from 45 thousand hours to 50 thousand hours will not result in ANY additional revenue to fund ANYTHING unless those additional 5 thousand hours are utilized by employers.

Our economy cant even fully utilize a 40 thousand hour work-life.

Edited March 20, 2016 by dre

[msj]

Sure, that may be the case.

Hence my call for more data.

We need to understand this issue so we can decide whether we want to tax and spend at an age 65 level or if we want to tax less and spend less at an age 67 ( or whatever) level.

The point is is that we can choose numerous options of cutting, taxing and spending to achieve numerous results.

So far the default conversation is always about cutting the OAS by pushing the age level up without consideration of other options.

ETA: my response is to Argus and not dre. Have to skype with my French people now so later....

Edited March 20, 2016 by msj

[ReeferMadness]

We probably would have had to hire Norwegians to run things though. We're just plain no good at it.

Ain't that the truth.

Every time we get a good thing going, we vote in some right wing huckster who assures us it will last forever and it's happening because we deserve it and so we really should have low flat taxes and no sales tax. And when the good times are over, we look for someone to blame.

[Smallc]

There are no provinces in the UK. Add the debt of our provinces to the mix

That would be meaningless, as neither jurisdiction is responsible for the other's debt.